Osteoporosis affects 10 million Americans and another 34 million are osteopenic and at risk for developing osteoporosis. Since the 1960s, bisphosphonate drug therapy has produced clinical benefits such as improved bone density and reduced fracture risk by slowing osteoclastic bone resorption. Many of the existing anti- resorptive drugs are plagued with untoward side effects and limited duration of clinical benefits. New and improved strategies for therapeutic intervention in osteoporosis are needed, particularly in the area of new medicines that safely promote anabolic bone growth. Presently, there is only one FDA approved bone anabolic agent, Forteo (teriparatide) that confers significant clinical benefits in osteoporosis, but its use is severely restricted due to safety concerns. Multipotent mesenchymal stem cells (MSCs) are precursors of a variety of cell types, including osteoblasts and adipocytes. Formation of new bone is driven by osteoblastic differentiation of MSCs, a process that can be disrupted by age and various disorders including diabetes and cancer. Parhami et al. discovered that specific oxysterols induce osteogenesis when applied to MSCs while inhibiting their adipogenesis. The most promising proprietary semi-synthetic oxysterol to date, OXY133, displays increased potency for osteogenic differentiation in vitro, including in primary rat, rabbit, and human MSCs, and it stimulates robust localized bone formation in vivo in rat and rabbit spine fusion and cranial and femoral defect models. During the SBIR Phase I research, we begun evaluating Oxy133 as a bone anabolic agent in the context of systemic administration and bone targeting. We worked out practical methods for conjugation of OXY133 to a known bone-targeting agent (BTA) derived from tetracycline, and we developed detailed protocols for their bioanalytical assessment. The resulting Oxy133-BTA conjugates display strong in vitro binding to bone mineral and stimulate moderate to robust Hedgehog (Hh) pathway signaling and osteogenesis in MSCs. In a pilot study we found that one Oxy133-BTA conjugate, Oxy153, is deposited in bone tissue following ip administration in mice. Expanding on our successful Phase I studies, we propose to perform Phase II studies as part of 3 Specific Aims: 1) Characterization of the molecular mechanism of action of Oxy133-BTA conjugates, which includes the study of the structural requirements for binding of Oxy133-BTA conjugates to the allosteric sterol binding site of Smoothened (Smo) protein, and their examination of allosteric Hh pathway activation and induction of osteogenic differentiation; 2) Examination of the ADME/PK and tissue distribution properties of Oxy133-BTA conjugates in mice that will help identify candidate molecules best suited for in vivo systemic administration and efficacy studies; and 3) Assessment of the efficacy of select Oxy133- BTA conjugates to reverse osteoporosis in ovariectomized mice in vivo. Information obtained from these studies will lay the foundation for future IND-enabling Phase III studies that will lead to the development of new bone anabolic agents fit for use in humans.